While Canada, as a whole, is donating more, the number of individuals who are donating has decreased. Fewer charities are benefiting from the generosity as those who give tend to favor a few select charities. The Stretch Tax credit is an example of a current initiative that promotes giving. Charities are going to have to evolve to appeal to the masses and to find additional ways for people to give (e.g. donation of time, products, etc.). Please see related article in today’s Toronto Star below.
Canadians need to reverse troubling trend on charitable giving: Editorial
A smaller percentage of Canadians are giving to charities than in the past, though those who do are giving more. As a society we’re digging deeper into fewer pockets. It’s not a healthy trend. By world standards Canadians are generous givers. Collectively we reported giving nearly $8.5 billion to charities in 2011, a 2.6-per-cent hike, according to Statistics Canada and Revenue Canada. That’s an average $1,482 per tax filer, a fairly hefty sum at a time when many find it hard to make ends meet. Ontarians on average gave $1,668. And in Toronto, it was $2,119. But despite this healthy impulse to support Canada’s social fabric, Imagine Canada and other groups that promote charities and non-profits warn that a worrisome trend is taking hold. Relatively fewer people are giving than in the past. Those who do — and people who make $80,000 or more give half of all donations — are giving more. As a society we’re digging deeper into relatively fewer pockets.
In 2011, about 5.7 million Canadians reported charitable donations on their tax returns. That’s 23 per cent of all tax filers, down from 23.4 per cent the year before and significantly down from 29.5 per cent in 1990, when 5.5 million contributed. This disconnect spells trouble not only for the churches and religious causes that top donors’ giving lists, but also for universities, colleges, hospitals and a panoply of community services and foreign aid agencies that rely on private generosity to better the lives of millions of people. A donor base that shrinks relative to the growing population leaves charities vulnerable as demands on them increase. Alert to the problem, successive Liberal and Conservative governments have adjusted federal tax policy to encourage wealthy donors. Deduction limits have been raised and incentives have been increased for donations to charities and foundations not only of property, but also of securities and ecologically sensitive lands.
Imagine Canada has also lobbied Ottawa for a measure known as the Stretch Tax Credit that would provide an incentive for donors to increase their giving year over year. There is evidence that such a credit could significantly increase the median donation — the point at which half of those claiming a donation gave more and half less. It was $260 nationally in 2011 and $320 in Ontario. The stretch credit would also encourage more people to become donors. The Commons finance committee has urged the government to explore it. These relatively modest median numbers serve as a timely reminder, too, that even small donations add up. So here’s a thought to carry through 2013: By setting aside a loonie a day for charity, less than the cost of a cup of coffee, anyone can be a leader in building up the fabric of their community, and help reverse a troubling trend.